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Anchor v. Novartis Grimsby Ltd.

November 27, 2006

ANCHOR, ET AL., PLAINTIFFS,
v.
NOVARTIS GRIMSBY LTD., NOVARTIS INT'L PHARMACEUTICALS LTD. AND NOVARTIS PHARMA AG, DEFENDANTS.



The opinion of the court was delivered by: William M. Skretny United States District Judge

DECISION AND ORDER

I. INTRODUCTION

Plaintiffs in this action are from Holley, N.Y., where, on January 5, 2002, an explosion at the Diaz Chemical Corporation ("Diaz") facility resulted in the release of toxic chemicals into the air. Defendants Novartis Grimsby Ltd ("Grimsby"), Novartis Int'l Pharmaceuticals Ltd. ("NIP") and Novartis Pharma AG ("Pharma") are foreign corporations that are allegedly liable for the environmental contamination caused by the explosion. Plaintiffs seek redress for personal injury, property damage and response costs pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq. ("CERCLA"), as well as various state common law and equitable theories, including negligence, private and public nuisance, and strict liability. (Amended Complaint, ¶ 6.)

Presently before this Court is Defendants' Motion to Dismiss Plaintiffs' Amended Complaint for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, and for failure to state a claim upon which relief may be granted pursuant to Rule 12(b)(6). For the reasons set forth below, this Court finds that Plaintiffs have failed to establish that this Court has personal jurisdiction over the foreign defendants in this action. Defendants' Motion to Dismiss on jurisdictional grounds will therefore be granted.

II. BACKGROUND

A. Standard of Review: Rule 12(b)(2)

When challenged with a motion to dismiss pursuant to Rule 12(b)(2), the plaintiff bears the burden of establishing that the court has personal jurisdiction over the defendant. See In re Magnetic Audiotape Antitrust Litig., 334 F.3d 204, 206 (2d Cir. 2003) (per curiam); Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994). If the court relies on pleadings and affidavits, rather than a full evidentiary hearing, to resolve the motion, the plaintiff need make only a prima facie showing of personal jurisdiction to carry its burden. See Distefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001); Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999) (citing Marine Midland Bank v. Miller, 664 F.2d 899, 904 (2d Cir. 1981)); Langenberg v. Sofair, No. 03 CV 8339, 2006 WL 2628348, at *2 (S.D.N.Y. Sep. 11, 2006).

In determining whether the plaintiff has made this showing, the court is not obligated to draw "argumentative inferences" in the plaintiff's favor. Robinson, 21 F.3d at 507 (citing Atl. Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 198 (2d Cir. 1992)). However, the pleadings and affidavits, and all doubts arising therefrom, are construed in the light most favorable to the plaintiff. See CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 365 (2d Cir. 1986). The facts below are drawn from the Amended Complaint and the declarations filed in support of Defendants' Rule 12(b)(2) motion. See Langenberg, 2006 WL 2628348, at *5 ("courts are authorized to rely on affidavits submitted by the parties in deciding a Rule 12(b)(2) motion to dismiss").

B. Facts

1. Parties

There are approximately 144 plaintiffs in this action. Many of the plaintiffs have brought suit individually and as parents or guardians of minor children. All of the plaintiffs are current or former residents of Holley, N.Y., or are real property owners who have been negatively impacted by the January 5, 2002 explosion at the Diaz facility. (Amended Complaint, ¶ 2.)

Each of the three defendants is a foreign entity: Grimsby is a British corporation; NIP is an Irish corporation; Pharma is a Swiss corporation. (Amended Complaint, ¶¶ 9-11.) None of the defendants are incorporated in New York or licensed, registered or authorized to do business in New York. (Bantle Decl., ¶¶ 3-4; O'Gara Decl., ¶¶ 3, 4; Clarkson Decl., ¶¶ 3, 4.) None of the defendants, have offices, agents or bank accounts in New York, nor do they have officers or employees located in New York. (Bantle Decl., ¶ 5; O'Gara Decl., ¶ 5; Clarkson Decl., ¶ 5.)

2. The Explosion at the Diaz Facility

The Diaz facility manufactured specialty chemicals for use in agricultural and pharmaceutical industries. (Amended Complaint, ¶ 104.) On January 5, 2002, at approximately 10:45 p.m., an explosion occurred during the manufacturing of 2-chloro-6 fluorophenol ("CFP"). (Amended Complaint, ¶ 125.) Hot chemicals in a chemical process tank exploded through a rupture disk, resulting in the release into the atmosphere of various hazardous liquid and vapor substances, including CFP, 2,4-dichloro-6 fluorophenol, and toluene. (Amended Complaint, ¶ 125.) Fumes and odors from the explosion permeated the Village of Holley and other areas as far as 12 miles away. (Amended Complaint, ¶ 127.) Corrosive chemicals coated vehicles, houses and other surfaces. (Amended Complaint, ¶ 126.) Many of the plaintiffs called 911 to report the explosion and odor, as well as burning in their eyes. (Amended Complaint, ¶ 128.) Many of the plaintiffs were forced from their homes. (Amended Complaint, ¶ 130.)

The toxic chemicals released during the explosion dissipated very slowly. (Amended Complaint, ¶ 131.) The chemicals were eventually absorbed by materials in the Village of Holley and on Plaintiffs' properties, including trees, plants, siding, roofs, furniture, clothes, draperies and bedding. (Amended Complaint, ¶ 131.) Moreover, Plaintiffs have inhaled, ingested and absorbed the toxic chemicals into their bodies, and have suffered severe headaches, nausea, vomiting, constriction of the throat and chest, difficulty breathing, bloody nasal discharges, skin burns and irritation, kidney pain and other physical ailments. (Amended Complaint, ¶ 135.)

Plaintiffs allege that the Diaz facility lacked adequate safety and environmental controls for the chemical processes it conducted, particularly for the production of CFP. (Amended Complaint, ¶ 108.) For example, they assert that the facility's rupture disks were improperly designed to release process chemicals into the ambient air when pressure built up inside a process tank or system. (Amended Complaint, ¶¶ 108-109.)

3. Defendants' Relationship with Diaz

In their Amended Complaint, Plaintiffs allege that in 2000, Diaz began participating in a "program" established by Defendants to produce CFP for use in a new pharmaceutical drug. (Amended Complaint, ¶ 111.) Defendants allegedly provided Diaz confidential technical specifications and other information concerning CFP so that Diaz could develop a production process for the chemical. (Amended Complaint, ¶ 112.) Plaintiffs allege that Defendants knew that the manufacturing of CFP was dangerous and Defendants even ...


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